Posted!

Join the Conversation

Comments

Welcome to our new and improved comments, which are for subscribers only.
This is a test to see whether we can improve the experience for you.
You do not need a Facebook profile to participate.

You will need to register before adding a comment.
Typed comments will be lost if you are not logged in.

Please be polite.
It's OK to disagree with someone's ideas, but personal attacks, insults, threats, hate speech, advocating violence and other violations can result in a ban.
If you see comments in violation of our community guidelines, please report them.

OPINION

Update on La. state worker's health plan — Column

The fact that health care costs are rising is indisputable. The average health insurance premium has risen by 196 percent since 1999. Medical debt is the number one cause of bankruptcy. And this year, heath care spending growth hit a ten year high. It's not difficult to understand why employers are making changes to their health plans. The question is how to balance the increased cost without overburdening members.

That's the question that the Office of Group Benefits has been grappling with for years. OGB provides insurance for 230,000 state employees, retirees and their dependents across Louisiana. And when it announced it would make changes to its plans in 2015, questions came pouring in from members and legislators. Why are changes necessary? Who is to blame?

The last time OGB made significant changes to its offerings was in 2008 when it added the current statewide HMO plan to the available options.

When the HMO was launched in 2008, premiums for a single employee were $130.18. In 2015, that plan will offer premiums of $140.38. That's a little more than a 7.5 percent increase over a seven year period. In that same seven year period, premiums across the country rose by 31 percent.

OGB's claims rose in that time period as well. Since the HMO was introduced, claims grew from $993 million to $1.37 billion in 2014 — a 28 percent increase.

Today, OGB finds itself in the same situation as other employers across the country. Health care costs are still rising at about six percent a year, the Affordable Care Act is projected to cost $24 million a year, with the potential for an additional $31 million "Cadillac tax" in 2018 if changes are not made. And after two years of using the fund balance to shield members from the true cost of care, it has reached a stable target balance.

So, how does OGB manage the increased cost of health care? When employers face rising costs, they have only a few options. They can raise rates and ask employees to pay more, they can adjust benefits by shifting the cost share on certain procedures and plans, or they can spend less on administrative costs.

The plans OGB will offer in January do a remarkable job of balancing all of those options. While rates increased for the first time in nearly three years in July, they will not increase in January.

The largest change to the plans offered in 2015 is the increase to the out-of-pocket maximum. Less than three percent of members in OGB's HMO plan reached the out-of-pocket maximum last year. That means that for most members, the increased maximum won't affect their bottom line. The other major change is the addition of a $500 deductible to the HMO plan. While the deductible only applies when a co-pay doesn't, members in that plan will have to reach the deductible before the plan will pay a larger portion towards care.

In a perfect world, OGB's costs would stay flat and no members would be pay any more for care than they did when they first signed up. Unfortunately, rising healthcare cost trends require OGB to make changes as well. What won't change, however, is OGB's history of effectively managing costs to provide its members with quality care at affordable rates.